Recession and The Environment II – Climate Change: Root Causes and Solutions

Confidential.

Here you will find further elements to support the daring- almost presumptuous hypothesis advanced in my previous post "Recession and The Environment I. "

Many of you may have been surprised, as I was myself, (confidentially) by the extent of my uncharacteristic daring leading to the first analysis and opinion, as to the root causes and solutions to the the top "Re-current Affairs" issue of the day: "Economic & Financial Recession" cf. Title above.

Well rather than back-off, I'm sure you will be pleased to read further evidence in support of my previous hypothesis. The urge to further research the issue came rapidly. Evidence came equally rapidly. A couple of Google searches and my experience of good sources turned up a comment on "Recession, Energy <=>Environment, Finite Resources, Climate Change

Contributor whose "alias?" is "MARKANASH" posted this comment 24 Sep 2008, on the Idle Scrawl Paul Mason's blog. Paul is a much travelled Economist and BBC reporter.

Quote:
"You're totally missing one fundamental point. Our present way of life is predicated on using tomorrow's money to pay for what we want today (debt). This in turn relies on endless economic growth. Economic growth on the scale to which we have become accustomed is based almost entirely on cheap energy - stacked and stored in the earth for millions of years and now having been gorged by humans for the past 100 years. The era of cheap energy ends about now; our Energy Return on Energy Invested will drop precipitously in the coming decade or two. No amount of fancy, debt-fuelled financial products, derivatives and systems will operate without reliable (ie cheap energy based) economic growth. The rates of economic growth we've experienced in our lifetimes are about to cease (or at least fall dramatically) as we figure out how to live within our energy means. So, forget trying to put back into its shell the scrambled egg that is now the Anglo-US financial system. Start figuring out how to live without cheap energy and, so, without unsustainable economic growth. I don't have the answers, but I do know that the transition from us relying on cheap (borrowed) energy to a lifestyle based on the sustainable use of real-time energy is going to be painful. Bankers and financiers have yet to see the problem, let alone figure out solutions. "


My rapid search turned-up complimentary evidence in support of MARKANASH's blunt opinion on bankers and financiers:

There is a very commonly held view and justifiable public outcry on executive remuneration packages-here "Top B's" B short for merchant bankers - and their followers. This is put forward by many as a leading root cause of the present predicament. Here I contend that this fits the "irresponsibility theme" under pinning Pacala's heart felt analyis and disgust, which I share to a large extent and amplify, need I add. (cf. my previous post).

One of my "hero's-mentors", here in France, is Jean Francois Kahn, JFK to the intimates, we have met a couple of times - no kidding. JFK, as he has done for several years now, again lashes out at the irresponsible discrepancy between Top Dog remuneration packages and results, and also to their collective disconnection or memory loss from common reality.
JFK has a very imagery way of situating the levels of such packages. He compares the the top Dog Salaries & remuneration packages to the number of centuries the common worker on minimum wage would need to work. Yes it runs into centuries! From memory this tallies up to something like from the 6th century to the present day (15 centuries)!!!

In the current case he considers that Bankers morality - professional ethics (responsibility) is strongly questionable and a major contributing factor to the current financial crisis and recession. He remarks that the president of Lehmans Bros helped himself to 23M$ salary or package last year while in the same year he recommended that the US admin. refuse a 5M$ budget to help under-privileged - the dirt poor US citizens. This is just one example of many. Kahn calling "a spade a spade" frankly considers this behaviour to be totally immoral, and who can disagree? I wonder how much fresh cash this approach may generate?

Here rests the case for the prosecution!

Source: Paul Mason's blog post "We are not doomed: Discuss" which started the debate among his contributors, eg. "markanash" quoted above amoung others. Paul supplies links to short summaries of underlying economic theory. It's a quick read & well worth a squint which is all the reading necessary - He defends the system concluding: "In short I propose what could come out of this is a highly regulated and more stable info-capitalism." Wonder why it did not come before? Then my experience comes from ... partly through Aeronautic & Nuclear Materials Quality Control, Assurance Standards & Stringent Clients Requirements - no kidding there, at least in the West. No wonder students flee the exigence of science and engineering!

Recession and The Environment I – Climate Change -Root Causes and Solutions

THE AIM of this post:

I propose to develop the hypothesis that lack of vigour to combat climate change, especially by world leading US administration, is one root cause, if not the main root cause for the current economic-financial recession. I base this on the stabilising wedge methodology proposed by Pacala & Socolow and specifically in the excellent interview given by Pacala to IOP – Environmental Research. (If you have any comments on where the European Union stands in this I'd be more than pleased to hear)

Introduction-Summary.

I can’t do a better summary of the IOP* – Pacala** interview than that of Liz Kalaugher, editor of the relative new IOP environmentalresearchweb.(start 2007)
[ *IOP is the highly respected, Institute of Physics UK – **Pacala is with R. Socolow, the inventors of the Wedge Methodology-Tool to combate climate change by innovation from existing technology [Link] both are professors at Princeton Uni., He describes this himself in the interview as “The wedges paper, was never really intended as a practical scheme for deploying technology but rather as a way to get people to think about the problem so that those who were stalling with obfuscatory language would have to stop."] – [Mores the pity, One step forward two steps back? – JA.]

To Quote Liz: “Back in 2004, Stephen Pacala and Rob Socolow of Princeton University, US, came up with the concept of "stabilization wedges", a way of mixing and matching currently available technologies to cut carbon emissions by the amount needed to stabilize the climate. The paper was a reaction to what Pacala and Socolow saw as strategy to stall action on global warming by the Bush administration by claiming that the world lacked the technology to tackle it. While any one of today’s technologies alone is unable to meet the challenge, the pair showed that a portfolio of such solutions would be up to the job.”

Pacala describes how emissions and the planet have changed since publication of the wedges paper, the potential effects of a recession, how easy it might be to invent-[Innovate may be a better term] our way out of the problem, and his new work on calculating fair national emissions caps by assigning individual carbon allowances. (rationing-ration cards for carbon footprints –WWII wartime – post wartime technique-JA)

Four aggravating main developments since the fourth IPCC Report 2007-International Panel on Climate Change .

1. The first change since the IPCC report has to do with emissions growing too quickly.
2-3. the second and third have to do with carbon sinks being weaker than they were before.
4. Even if carbon sinks had not weaken, Ice sheet dynamics impose a tightening of the original 50y target. Now we need to reach a much more stringent one nearer 30y than we thought it was"
“There’s no good news in the mix and there’s plenty of bad news but the jury’s still out, we’ll have to wait and see.”

Pacala & Socolow’s motives:

-Stop the Bush Admin from stalling.
-Stop ‘the group of scientists that were writing grant proposals masquerading as energy assessments.” - “The call for blue sky research.”
-Stop the “unhealthy collusion between the scientific community" who believed that there was a serious problem and a political movement that didn’t”.
(NB. I seldom use itallics, perfering Straight,Upright characters.)

As a wise experienced scientist Pacala concludes that:
“It would be astonishing if it [CO2 The Wedge Methodology-Tool] weren’t false in many ways, but what we said was accurate at the time (2004 &Today).

Pacala et al - current road-map on Carbon Footprint

A. More on Stalling - the Stallers:

The China –US CO2 slanging match and All stallers put roughly is:

eg. China says “You [USA] already had your economic growth and now it’s our turn” and US points its finger at China and says it’s not fair to expect us to do that unilaterally when you’re the largest emitter in the world now. [cf. P. Senges simplified vicious circle concept using the Cold War Nuclear Arms race -You increase "its worth a bomb" -We increase... = Inflation -worth a bomb(?) fortunately without the big bang-Ultimate Crash, yet! -JA)

Pacala replies: “This rhetoric of fairness that reminds me a little bit of the former rhetoric of technological unreadiness. It’s just a gigantic stalling gambit.”

He provides several strong arguments in support of this :
“Concept of fairness that "they" are actually using here do not appear congruent with the concepts of fairness we use in our everyday lives.”

“Past emissions in the US do not necessarily have anything to do with the people there today, many are relatively new immigrants.”

“You receive the benefits of your western standard of wealth and you distribute the emissions costs to everyone in the world. The same is true of the Chinese person who has your income. It’s not that I have anything against China, but I don’t see why the wealthy in Shanghai ought to get a free ride.” [ Pacala does not mention the relative statistics, but the point is general.]
“Those dollars and the emissions that go with them have exactly the same robber baron roots as the money in your bank account. Money is promiscuous – it travels around the world.”

B. THE FILTHY RICH:
“You receive the benefits of your western standard of wealth and you distribute the emissions costs to everyone in the world.”

Pacala et al. are working, in his own words, on a “fancy-schmancy statistical thing;” effectively an “Analytical Accountancy Method –ie physically based” bottom-up (individual) Emissions Capping System aggregating national caps to international one all based on the individual etc. [ a sort of Rationing system to call a spade a spade].

He only hints at some basics since at the time of the interview 12 May 08 their work had not been published.

“You could have one number for the whole world, reducing it every year. Although I can’t tell you precisely what the answer is because the work is not yet published, I will tell you that it simultaneously passes the laugh test and offers sensible”.

“One hint is that the climate problem turns out to be almost entirely a problem of the wealthy – 50% of emissions are caused by the top 700 million emitters. And a substantial fraction of those people – on the order of a fifth – actually live in developing countries.”

"It’s got a nice little [read nasty?] feedback loop in it, if you grow faster economically and you have a whole bunch of rich people then your target comes down faster. If you grow slower and your people stay poor then you never hit the cap."

[It’s well known that the wrong way forward is to have a Russian style economic and industrial collapse thereby reducing emissions drastically – The "wise-cracks” call this “Schumpeter"[Link1] destructive creation-innovation process[Link2] or something ” – (you can’t go down any further so, if you live through it, the only way is up-rebuild. Not sure if that's what Pacala mean't. There are well-off-rich & stinking rich, & same on the poor man scale. I must re-read him - JA]

“I’ve got money now and I’m the one that’s spending it. I’m getting all the pleasure but I’m distributing all the pain” says Pacala. [Sounds about right, and I would suggest to the chaps in Princeton, if their jobs are not on the line, that they would do well to start not at the bottom but near the National leadership level to be credible all down the line – battle of the comms-(communication) aside! If their jobs are at risk it's time to call on me, confidentially.

See what I mean: Pacala quotes “If the US will just get out in front and act unilaterally, it seems to me that’s a major missing element that would cause everyone else who’s missing their Kyoto targets to buck up and start to deliver on their own commitments.”

My proposed conclusion

But US did not sign Kyoto, and push it forward - as in the famous SALT treaties on nuclear arms of which I am no expert-, and this has sent all the wrong messages. It could plausibly be argued that this is the root cause of the current financial crash and recession-JA.

Solution-
cf. Pacala approach above and their abundant freely available online work.

Let me add: I urge you the source and comment -naturally praise is preferable, abuse tolerated, but Above-All all, information is necessary and will be shared unless otherwise requested. Fee free - Tighter emissions rationing is on the agenda and economic resession will not be tollerated - work that one out.

Source: Link

NB. As the fastest evolving current "Affairs" theme I have carried out a little more research and will share this with you in my next post.